The Jamie Dimon Interview

Summary

Acquired Podcast: The Jamie Dimon Interview Release Date: July 16, 2025

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Introduction

In the July 16, 2025 episode of Acquired, hosts Ben Gilbert and David Rosenthal engage in an in-depth conversation with Jamie Dimon, CEO of JPMorgan Chase, to explore the evolution of one of Wall Street's most influential figures and the strategies that propelled JPMorgan Chase to its current standing as the largest and most valuable bank in the United States. Recorded live at Radio City Music Hall before an audience of 6,000 fans, this episode delves into Dimon's early career challenges, his pivotal decisions during financial crises, the formation of a "fortress balance sheet," and the cultural ethos that differentiates JPMorgan Chase from its competitors.

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Early Career and Setbacks

[00:00 - 06:12] Ben Gilbert and David Rosenthal begin the episode by recounting their initial meeting with Jamie Dimon at JP Morgan, humorously noting their missed opportunity to inquire about the famous Duel Pistols housed in the bank's headquarters. This sets the stage for discussing Dimon's rise and resilience in the financial sector.

[05:20 - 07:03] Jamie Dimon reflects on his unexpected termination from Citigroup in 1998, despite being regarded as the “heir apparent” and a Wall Street rising star. He describes the emotional impact of being fired, sharing a poignant moment with his children and the support he received from his management team. Dimon's graceful handling of the setback underscores his resilience and forward-thinking mindset.

Jamie Dimon [07:07]: "You're my net worth, not my self-worth."

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Transition to Bank One and Reforming Risk Culture

[09:38 - 17:28] After an 18-month period of uncertainty, Dimon joins Bank One in Chicago, a troubled $21 billion bank, marking a significant career shift from his previous role at Citigroup. On Day One, he discovers severe internal conflicts and inefficient systems due to multiple mergers that left the bank fragmented and struggling.

Upon assuming leadership, Dimon implements a rigorous risk management strategy, fundamentally altering the bank's approach to credit risk. He emphasizes the importance of conservative accounting and proper risk pricing, which involved marking down all existing loans and increasing reserves. This decisive action laid the foundation for what he terms the "fortress balance sheet" philosophy.

Jamie Dimon [17:28]: "Risk conscious does not mean getting rid of risk. It means properly pricing it and understanding the potential outcomes."

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Building the Fortress Balance Sheet

[19:14 - 25:12] Dimon's relentless focus on risk management and capital adequacy distinguishes JPMorgan Chase from other financial institutions prone to aggressive risk-taking. By ensuring a strong capital base and minimizing leverage, Dimon protects the bank against economic downturns. He hires key personnel like Linda Bamman to helm credit operations, further reinforcing the bank's stability.

Jamie Dimon [19:33]: "Don't blow up at all costs."

Dimon contrasts his approach with the prevalent Wall Street mentality, which often overlooks long-term stability in favor of short-term gains. His commitment to conservative risk management not only safeguards the bank during crises but also enhances its reputation among shareholders and the broader financial community.

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Navigating the 2008 Financial Crisis

[36:24 - 43:32] In March 2008, amid the burgeoning financial crisis, Dimon plays a pivotal role in the Bear Stearns bailout. Faced with Bear Stearns' imminent bankruptcy, he orchestrates a swift $30 billion rescue effort, purchasing the struggling firm at a dramatically reduced price of $2 per share. This bold move, though costly (~$20 billion), helps avert a larger financial catastrophe and cements JPMorgan Chase's reputation as a stabilizing force in the banking sector.

Jamie Dimon [38:50]: "It was quite painful, but gotta move on."

Following Bear Stearns, Dimon also acquires Washington Mutual (WaMu), another distressed bank, during the crisis. His strategic acquisitions not only bolster JPMorgan Chase's asset base but also demonstrate his capability to execute under pressure, further enhancing trust among investors and customers.

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Cultural and Strategic Differentiators

[55:06 - 59:26] Dimon attributes JPMorgan Chase's superior efficiency ratio—where the bank retains 15 cents more per dollar of revenue compared to competitors—to a combination of strategic focus and a strong organizational culture. He emphasizes the importance of aligning all business units with a coherent strategy that fosters mutual support and synergy, unlike Citigroup's fragmented approach.

He likens the company's teamwork to that of a successful sports team, where discipline, mutual respect, and shared goals drive sustained performance. Continuous investment in people, branches, and technology ensures that JPMorgan Chase remains agile and competitive.

Jamie Dimon [58:26]: "Continuously investing and gaining business at the margin and not stopping and not stop starting."

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Responding to Modern Challenges and Future Outlook

[47:26 - 54:45] Addressing contemporary issues, Dimon discusses the rise of private credit markets and the potential risks associated with their rapid growth. He also highlights cyber threats as a significant concern, noting JPMorgan Chase's substantial investments in cybersecurity to protect its vast infrastructure.

Looking ahead, Dimon underscores the importance of maintaining a strong capital position and conservative risk practices to navigate future financial landscapes. His dedication to building a robust, client-focused institution positions JPMorgan Chase to continue thriving amidst evolving economic conditions.

Jamie Dimon [55:06]: "Our people are curious and smart. They have heart, they have soul."

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Personal Insights and Motivation

[60:27 - 63:58] Dimon shares personal motivations, attributing his enduring drive to his immigrant grandparents' work ethic and the support of his family. He emphasizes a hierarchy of life priorities: family, country, and then personal purpose through his role at JPMorgan Chase. His commitment to contributing positively to society and the financial system fuels his ongoing involvement and leadership.

Jamie Dimon [61:20]: "Have a purpose and then do the best you can, you know, give it your all."

Dimon contemplates his post-CEO aspirations, expressing interest in teaching and writing, but remains dedicated to his current role, recognizing its substantial impact on the nation’s economy and financial stability.

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Conclusion

Jamie Dimon's interview on Acquired offers a comprehensive look into the leadership and strategic decisions that have shaped JPMorgan Chase into a banking powerhouse. From overcoming career setbacks to implementing rigorous risk management and executing critical acquisitions during financial crises, Dimon's unwavering focus on stability, efficiency, and culture sets JPMorgan Chase apart in the competitive financial landscape. His personal commitment to purpose and societal contribution underscores the enduring legacy of his leadership.

For listeners seeking more insights into the stories of great companies and their leaders, Acquired continues to provide valuable narratives and lessons applicable to various business endeavors.

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Notable Quotes:

• Jamie Dimon [07:07]: "You're my net worth, not my self-worth."
• Jamie Dimon [17:28]: "Risk conscious does not mean getting rid of risk. It means properly pricing it and understanding the potential outcomes."
• Jamie Dimon [19:33]: "Don't blow up at all costs."
• Jamie Dimon [38:50]: "It was quite painful, but gotta move on."
• Jamie Dimon [58:26]: "Continuously investing and gaining business at the margin and not stopping and not stop starting."
• Jamie Dimon [61:20]: "Have a purpose and then do the best you can, you know, give it your all."

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This summary is intended for informational and entertainment purposes only and does not constitute investment advice.

Transcript

[Ben Gilbert]

David, we completely blew it. We went into Jamie Dimon's office, had our little meet and greet. We did not ask about the Duel Pistols.

[David Rosenthal]

Yeah, from the Duel. Alexander Hamilton and Aaron Burr, which JP Morgan owns and keeps in their headquarters. And we blew it. We didn't ask to see them. We'll just have to come back when.

[Ben Gilbert]

They finish the new building. I'm sure they will be in the executive floor. We can go get a viewing of the, you know, piece of American history.

[David Rosenthal]

All right, speaking of American history. Let's do it.

[Ben Gilbert]

Let's do it.

[Jamie Dimon]

Radio City. Are you running? Who got the truth? Yeah. Is it you, is it you? Is it you? Who got the truth now? Now?

[David Rosenthal]

Is it you?

[Jamie Dimon]

Is it you? Is it you? Take it down. Say straight. Another story all the way. Got you.

[Ben Gilbert]

Welcome to the summer 2025 season of acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert. I'm David Rosenthal and we are your hosts. Today's episode is the story of a rising star on Wall street in the 1980s who worked with his mentor to merge and acquire their way to the top of the financial world in the 90s, who then got fired unexpectedly by that same mentor who cast about deciding what to do next and then in 2000 accepted a job turning around a poorly run Midwestern bank. Then over the next 25 years, he would orchestrate one of the most remarkable runs in banking history and really all of corporate history. This is the story of Jamie Dimon and how he created the modern financial behemoth JPMorgan Chase out of the beleaguered component parts of of Bank One, JPMorgan Chase, Bear Stearns, Washington Mutual and First Republic. Jamie is now the longest serving CEO of any major Wall street bank and is viewed as kind of the great stabilizer of the American financial system, especially during the 2008 financial crisis. He now sits atop the largest bank in the US with an over $800 billion market cap, which is more than twice their nearest competitor. They are the only bank within spitting distance of these sort of big trillion dollar tech companies that we've covered here unacquired. And to really put a finer point on the dominance, they are the most valuable company east of the Mississippi in the United States and the only company east of the Mississippi worth more than half a trillion dollars.

[David Rosenthal]

Incredible.

[Ben Gilbert]

So the question of course is how did he do it? I mean, banks fail. Financial firms often have spectacular blow ups and and large organizations, period, financial or not, can often get so bloated that they slow down to a crawl. So what did Jamie Dimon do differently? Well, today's episode, we have Jamie with us himself to tell the story. We recorded this live in front of 6,000 acquired fans at Radio City Music hall in New York City. So you'll notice it's a different format than our usual episode. We're always trying to figure out what version of Acquired works live with an audience. And this is our latest iteration. The Radio City show also had a second act, a late night talk show where we had conversations with the CEO of the New York Times, Meredith Kobit Levian, and the chairman of iac, Barry Diller. Plus some cameos from around the acquired cinematic universe. And we cannot wait to share all of that with you at a later date. Well, if you want to know every time an episode drops, check out our email list. Acquired FM Email. Come join the Slack and talk about this with us afterwards. Acquired FM Slack. If you want more acquired between each monthly episode, check out ACQ2, our interview show where we talk with founders and CEOs building businesses in areas we've covered on the show. And before we dive in, we want to briefly thank our presenting partner, J.P. morgan.

[David Rosenthal]

Yes, the same J.P. morgan. Which is funny because when we started planning this show together, gosh, almost a year ago, it was immediately clear to Ben and me that the very best person who acquired could interview in New York also happened to be their CEO.

[Ben Gilbert]

And as you all know from the episodes over the last couple years, JP Morgan has been a fantastic partner of ours and their payments team demoed all kinds of cool technology at the event. Our huge thanks to the JP Morgan team for putting on the show with us. And if you ever want to learn more, just click the link in the show notes and tell them that Ben and David sent you. So with that, this show is not investment advice. Dave and I may have investments in the companies we discuss and. And this show is for informational and entertainment purposes only. Onto our conversation with Jamie Dimon. Well, this feels appropriate.

[Jamie Dimon]

You guys dressed up for me.

[David Rosenthal]

You dressed up for us too. Thank you. Last year we had you on the video board at Chasen. You were looking very summery there. You look great tonight.

[Jamie Dimon]

Thank you.

[Ben Gilbert]

Yes, well, we know you're a big history buff and we consider ourselves historians above all else. So what we'd like to do here tonight is walk through the 20 year story with you of sort of how you turned JPMorgan Chase from a bank of many a bank, among many, to the most systemically important financial institution in the world. Are you game?

[David Rosenthal]

Sound good?

[Jamie Dimon]

Sounds great. Thank you.

[David Rosenthal]

We want to start in 1998. You and your mentor, Sandy Weil, have just spent the past 13 years building the modern financial institution, conglomerate, really the blueprint for what JPMorgan Chase is today. Except it's not JP Morgan, it's Citigroup. And everybody on Wall street in the entire world expects that you are going to be named CEO of Citigroup in short order.

[Ben Gilbert]

This is 1998.

[David Rosenthal]

1998. This is not what happens. Instead, you get fired and you have to restart your whole career, everything, your whole life, from scratch.

[Ben Gilbert]

Sorry to start here, by the way.

[David Rosenthal]

Before we get into what you do next, what was the model that you and Sandy built at Citigroup?

[Jamie Dimon]

Okay, first of all, I am thrilled to be here. I want to congratulate these guys for building the acquired. It's a great, intelligent addition to what we need to learn in society. And so I would say it wasn't quite the model because if you look at what we did at Commercial Credit Primeric, which then Travelers and merged, we were a financial conglomerate. We bought lots of companies and lots of different businesses. We fixed them up, we turned around, we made money. And then we merged it with Citibank, which obviously was a huge bank. And, you know, my view is I was, we should skinny it down and kind of shed the parts that aren't that important to the rest of the company and keep the things that strategically belong together together. It was one of my small disagreements with Sandy about the future of the company. But it was big. It was making a lot of money. It was quite successful at the time. And then I got fired.

[Ben Gilbert]

So how are you feeling in that moment?

[Jamie Dimon]

When I got fired?

[Ben Gilbert]

Yeah, that moment.

[Jamie Dimon]

Well, my wife is here and I was hosting 100 people recruiting kids in my apartment in New York City, same apartment I have now. And they called me. We have Masjid meeting Sunday at 4pm that night. And Sandy and John Reed called me up and said, can you come a little early? We got a bunch of stuff to talk about. I was the president, chief operating officer. I said, I can't. They said, well, it's really important. So I drove up there and I sat down in the room with Sandy and John and they said they want to make a few changes and there are three of them. And they said, one, we want to make this person in charge of that. I said, okay. Well, that didn't make sense to me. The second one, they wanted to make someone in charge of the global investment bank, which I was Running. I thought it was another stupid decision. And the third is they said, and we want you to resign. And I said, okay, because, you know, at that moment I knew it was all arranged. The boards had voted, the press release was written, the management team was coming up. So I waited, you know, for the management team to come up. I wish them the best. I said, you guys have a chance to build one of the great companies. They all thanked me. Sandy said, you want to do the press with me? I said, yeah, but I'll do it from home. So I went home, went to see my kids. They were like one of my daughters here too. They were like 12, 14, 12 and 10. And I walk in the front door and I tell them I was fired. And the youngest one says, daddy, do we have to sleep in the streets? I said, no, no, we're okay. And the middle one, who was always obsessed with college for some reason, can I still go to college? And he said, yeah. And the one who was here was the oldest one, said, great, since you don't need it, can I have your cell phone? And then that night, about 50 people came over, all the same people I just met, all the management team bringing whiskey. And it was like, have been at your own wake. And there's one really tall guy who came in, a very good friend of mine. And he looks. And my daughter looks up and says, who are you? He says, I work for your daddy. And she says, not anymore you don't. And that was it. I was okay. You know, like I tell people, you're my net worth, not my self worth that was involved.

[Ben Gilbert]

And for anyone who doesn't sort of already know Jamie's story, you were the rising star. I mean, you were, the city was the biggest bank. You were the heir apparent. I mean, this was like unfathomable. And for you to take it this gracefully, you know, it says a lot. So you're sort of wandering in the woods as I best I can kind of reconstruct it for about 18 months. Is that right? Figuring out what's next?

[Jamie Dimon]

Yeah, I, you know, it took me a while to exit and sign agreements and get out. They were kind of mean, but. And then I step in office and it was late. We went for a nice long vacation and stuff like that. When I got back in September, so I was six months later, I went to my. I started going to work. Yeah, I had nothing to do, but I went from, you know, to 9 to 5 and started calling people and thinking about what I'm going to do. It was in the Seagrass Building. So I'd go for lunch downstairs every day.

[David Rosenthal]

At the Four Seasons.

[Jamie Dimon]

At the Four Seasons. And I explored everything throughout my own merchant bank. I could have retired just teaching, just investing, but I was 42.

[Ben Gilbert]

And you took a call about running Amazon, right?

[Jamie Dimon]

Say it again.

[Ben Gilbert]

You took a call about running Amazon, didn't you?

[Jamie Dimon]

I loved. I went to visit Jeff Bezos, who was looking for a president at the time. He and I hit it off. We've been friends ever since. He's an exceptional human being. But it was like a bridge too far. Even though that movie just came out, when Sally met Harry, I was thinking, my God, I'll never wear a suit again. I'll live in a houseboat. This would be really great.

[David Rosenthal]

What an alternate universe we'd be living in.

[Jamie Dimon]

It would have been an alternate universe. But I'm still good friends with Jeff, so I got at least one good thing out of it. And then I got serious, and I was offered jobs to run other big global investment banks. Hank Greenberg, who ran aig, called me up and said, you should come join us. I was thinking, I'm going to go from Sandy Wild to you. I mean, I have to have my head examined to do something like that. And then.

[David Rosenthal]

I didn't know the AIG story then.

[Jamie Dimon]

Yeah, well, that happened years later, too. And then I got a phone call from a headhunter about Bank One. And I was also. You guys, a lot of you probably know Ken Langone and Bernie Marcus and Arthur Blank ran Home Depot. I loved them. But at my first dinner with them, I went to see Midlands. I said, I have to make a confession. Until you guys called, I had never been in a Home Depot.

[Ben Gilbert]

We were actually wondering. David and I were debating.

[David Rosenthal]

We were talking about my lifelong New Yorker.

[Jamie Dimon]

My friend made me go up there and get some equipment and plants and stuff like that. But I love their culture, their attitude. They wanted me to do it. Ken Langone says, I still should have gotten you. I wasn't going to pay you enough. Of course, it had nothing to do with anything like that. And I had Bank One, but Bank One was my habitat. I was used to financial companies, you know, services, banking. It wasn't quite global. It was a little global at the time. And, you know, it was a troubled bank. And, you know, I decided that, you know, life is what you make it. It was hard in my family. We had to move. I think for anyone who's gonna move, kids that, you know, I think they were 14, 12, 10 or something.

[David Rosenthal]

Like, it's hard some context on Bank One for folks who are not familiar. It's not in New York. It's a large bank, but it's a troubled bank. It's based in Chicago.

[Ben Gilbert]

Large, David. It's a $30 billion market cap bank. Citigroup, where you just had been before, was a $200 billion bank.

[Jamie Dimon]

It was 21 billion at the time because it had. You have the right numbers, but it's did a split. And so if you look back, it's more 20 billion or something like that. Yeah. And Citi was 200, but I didn't worry about that. It was like, you know, in life you make things what they are. I don't like complaining about over spilled milk. You know, you just put on your pants, you get going, you see what you can make out of it.

[David Rosenthal]

But you. It sounds like you had opportunities to stay in New York to run.

[Jamie Dimon]

I did.

[David Rosenthal]

Bigger, more glamorous.

[Jamie Dimon]

This one, I was going to run the company. The other ones would have been some investment banks. I didn't really trust some of the people who were talking to me about that. And there's a whole bunch of other stuff that I explored. I took phone calls, some small companies, some big companies. There's a couple of subprime mortgage companies who called me and I was like, absolutely not.

[David Rosenthal]

We'll get to that, we'll get to.

[Jamie Dimon]

That, we'll get to that. And so I just thought this was a chance, you know, and, you know, if the family's willing to move and we got a nice. Took us a while. We had to live in rental for a while, but got a nice brownstone and, you know, we end up loving Chicago. Chicago is a wonderful city in a lot of different ways. And, you know, like I said, it is what you make it, you know, And I put half my money in the stock at the time. Yeah, you tied my. I was going to be the captain of the ship. I was going to go down with the ship. You know, I made it clear to everyone I was here permanently and it'll be what it is. And so I got to work, like, literally the next day.

[Ben Gilbert]

Did we do the math right, that right before you joined Bank One, you bought $60 million of stock?

[Jamie Dimon]

I did.

[Ben Gilbert]

I mean, I've never heard of someone taking a CEO job and saying, I'm going to invest half my net worth in this company now.

[Jamie Dimon]

Yeah. And I thought it might be overvalued a little bit because there was. People thought it might be sold or something like that, but I didn't Care about that. You know, if you work at a company and the new CEO comes in, he's from out of town, and you're going to have a lot of shareholders. And I knew a lot of the shareholders. I was going to know a lot of the shareholders. I wanted to know I was in 100%, lock, stock and barrel. There was no question I would never sell that stock. And I'm going to go down with the ship or go up with the ship. And they also knew I was making decisions that I thought were right for the long term health of the company, not for a short term type of thing.

[Ben Gilbert]

So what did you find when you got there? Day one on the job, you start investigating, is it better or worse? The same than you thought.

[Jamie Dimon]

You know, there had been an analyst called Mike Mayo, done a report. I remember one of the great lines of the report. Even Hercules couldn't fix it. It had been an amalgamation of Bank One, First Chicago, national bank of Detroit. They'd never put the companies together. So they had multiple statement systems, processing systems, payment systems, SAP systems. They had different brands, you know, services coming down. We were losing accounts, they were closing branches. It was a mess. But, you know, it was all of it, systems, people, ops. But again, I just, you know, I just, I met the management team. It's hard, you know, I walked In, I met six of the directors. There were 21 directors. 11 hated the other 10.

[David Rosenthal]

Wait, wait, wait. There were 21 board members, 21 board.

[Jamie Dimon]

Members from the merge. Multiple acquisitions. They were tribal. They ended up hating each other. I knew that when I went in because I knew one people and I spoke to a lot of people and did research in the bank. But again, in life, you get handed these things and it's not perfect. Even today, people want to be handed something perfect. It's not perfect. So I met six of the directors. I walked in when I got off of the job. I shook all their hands. I told them, I'm going to do the best I do. I'm going to tell you the truth, the whole truth, none of the truth. The good, the bad, the ugly. We're not going to bullshit. We're going to try to build a great company. I'm going to need your help. And then they said they left. So now I'm on the executive floor. I don't even know where to go. And so I kind of knocked on someone's door. The head of hr. I said, I do need an office and I really need an assistant. And they were going to give me the chairman's office in the corner. I said, no, no, I want to be like right in the middle so I can see people. And I stick my head out. And then I went to meet the management team. I went to this. They put them all in this conference room. Nice white plush carpets. I walked in with a cup of coffee and they said, jamie, we don't drink coffee in here for obvious reasons. So I looked at them, I looked at the coffee, I looked at them, I said, you do now. Then I just started meeting with them all. And the systems are terrible. The company's losing money. I didn't know all the businesses really well. So the credit card company had collapsed. That's probably the business I knew the least. But again, that didn't matter to me. I was going to try to fix it. It had some good assets and things like that. So I rolled up my sleeves and went to work.

[David Rosenthal]

When we were chatting a couple of weeks ago and preparing for this, we asked you in the context of JP Morgan, what are the critical things in your mind that has made JP Morgan what it is today? And the first thing you said was risk and was risk and the culture around risk and fundamental risk and the.

[Ben Gilbert]

Fundamental understanding by management of risk.

[Jamie Dimon]

Yeah.

[David Rosenthal]

When you got to Bank One, I think this is where you first started putting into practice the culture around risk. What was the risk culture@bank1 and how did you change it?

[Jamie Dimon]

Yeah, I've always been very risk conscious. And risk conscious does not mean getting rid of risk. It means properly pricing it and understanding the potential outcomes. And so when I got there, I just started meeting people and going through. I quickly realized that Bank One had more US corporate credit risk than Citibank did. And the way they accounted for it was unbelievably aggressive. And so they had less capital, less reserves, less this. They were calling these things profitable. They were basically losing money. And loans. In a lot of business you gotta be very careful about the credit business. And once I found out that, I kind of panicked a little bit and I went through every single loan in the books, I marked them all down, put up more reserves, told the board about it, and then wanted to earn more revenues per dollar of risk. So for example, in the middle market business, we had for every loan NII, we had like 80 cents and 20.

[Ben Gilbert]

Cents net interest income for the non.

[Jamie Dimon]

Bank from the loan and $0.20 of other revenue like payments. By the time we merged with JP Morgan, we had 40 NII for the loan and 60% NIR from other type of things like payments and One you're being paid for the risk and one, you're being paid little for the risk. And I always stress tested and I showed the board that if we have a recession and we're about to have one, how much money we'd lose in credit. So I hired a woman called Linda Bamman who said, okay, if you're gonna let me do credit, are you gonna let me sell loans? They said yes. Are you going to let me hedge loans? Yes. Can I do 10 billion? I said yes. She said, okay, I'll join. And we probably reduced the balance sheet by 50 billion because. And then we did have a recession, but we were kind of okay by them with one big bad one, which is United, which went bankrupt and we basically owned it for a small period of time.

[Ben Gilbert]

There seems to be kind of a fundamental Jamie Dimonism which is don't blow up. I mean, a lot of other people have gotten decent at pricing risk, but everyone else seems to be willing to get closer to the line than you. Where did you sort of develop this? Don't blow up at all costs.

[Jamie Dimon]

Around risk there's always this ecosystem, you've always heard it, everyone's doing it, everyone's okay, this is going to work. This time is different. And history tells you, learns, teaches you a lot. And I always say, my dad was a stockbroker. And so I bought my first stock when I was 14. In 1972 the stock market hit 1000. It hit 1000 in 1968. I was already helping a little bit with stuff. By 1974 it was down 45%. All the limousines in Wall street were gone, restaurants were being closed. Markets move violently. And then we had kind of a recovery in 1980, had a recession. 82. You had a recession in 82, was lower than it had been in 1968 and it hit 800. And then in 87 the market was down 25% in one day. In 1990, all these banks, JP Morgan, Citi, Chase Chemical, were all taken to their knees by real estate losses. And they were all worth about a billion dollars. I think Citi was 3 billion at the time. And the other ones were about a billion dollars. And then you had the 97, also real estate related thing. You had the 2000 Internet bubble and then you had the great financial crisis. And if you go through history, there's tons of these things. Andrew Rohr Sorkin is in here and I just read his book. He's nice enough to send it to me in 1929. And man, history does rhyme. Too much leverage, too much risk. Everyone thinks it's going to be great. No one thinks it can go down a lot. And that stock market went down 20% one year, 30% next year, 20% next year. At one point it was down 90%. Shit happens.

[Ben Gilbert]

It seems like your philosophy is that the worst thing will happen. So just plan for it. Don't say, oh, we're good as long as this crazy insane Four Sigma event doesn't happen. You're like, no, that will happen and happens often.

[Jamie Dimon]

Yeah. So when I look at it, I always ask like when I do stress testing at risk for high yield. The worst, I remember getting to JP Morgan and going through the risk books and their stress test was that high Yield would move 40% the credit spread. And that time was at 400 or whatever it was, that means 560. Okay. And I said, no, our stress test is going to be worst ever. Worst ever was 17%. And they said that'll never happen again. The market's more sophisticated. Well, in 08 it hit 20% and you couldn't have sold a bond. There was no market. So those things do happen. And the point isn't that you're trying to guess. And the point is you can handle them so you can continue building your business. And so I always look what I call the fat tails and manage that. We can handle all the fat tails and not the stress test the Fed gives us, but all the fat tails. Market's down 50%, interest rates up to 8%, credit spreads back to worst ever. Of course your results will be worse, but you're there. And the thing about financial services, leverage kills you, aggressive accounting can kill you, which a lot of companies do do and the goal should be. And also confidence if you lose money as a financial company. I always knew this too. The headlines are, you know, people read that and if they're relying on putting their money with you, they look at that difference, they lose trust, they lose trust. And that was cause you've seen runs on banks and you saw some recently because people run take their money out.

[Ben Gilbert]

There's a thing that you just said which is that you might do worse, but you're there. There's sort of this trade off that you make where you're less profitable in the short term, but at least you stick around. If you look back at the companies that you've run, big one, JP Morgan Chase, is that true in the good years that you've actually been less profitable than those who are kind of risk on.

[Jamie Dimon]

Yeah, a little bit. He's saying that, you know, if you look at the history of banks from up until 2007, a lot of banks earning 30% equity, most of them went bankrupt. We never did that much. Okay. But in 0809, we were fine and they weren't. And so. But you want to build a real strong company with real margins, real clients, conservative accounting, where you're not relying on leverage. And it's very easy to use leverage to jack up returns in any business. But in banking, it could be particularly dangerous.

[David Rosenthal]

So it seems like a core part, if not the entirety of this distilled into your operating strategy is the Fortress balance sheet.

[Jamie Dimon]

Yeah.

[David Rosenthal]

When did you first hear about the forstress balance sheet?

[Jamie Dimon]

I've been talking. I go way back to Primerica. I used to talk about that. You're going to be able to survive the tough times, probably the 1990s. And like I said, I grew up with my father and I went through those market things. I remember how hard it was on people on Wall street, but. But the Fortress balance sheet is. Yet you run a company serving clients well. You have good margins, good liquidity, good capital. I'm as conservative an accountant as you can find. I don't upfront profits when I can spread them over time. And accounting, of course, accountants hate it when I say this. You can drive a truck through accounting rules and accounting itself. Certain things are considered expenses, but they're good. They're an investment for the future, but they're called an expense. And then revenues. If I make bad loans, they are bad revenues. They will kill you, but for a while, they look pretty good. So it's all those things, margins, clients. In the banking business, the character, the clients you have will reflect on your bank. So the first thing is, who are you doing business with? How are you doing business? And also making sure your compensation plans aren't paying people for stuff, which is stupid or unethical. And you always have to review these things to make sure you have them right because they change all the time.

[Ben Gilbert]

All right, listeners, now is a great time to thank one of our favorite companies, Vercell.

[David Rosenthal]

Yes, Vercel is an awesome company. Over the past few years, they've become the infrastructure backbone that powers modern web development. And now the AI wave. If you visited a fast, responsive, modern website lately, or used a slick AI native app with agents and hyper personalized interfaces, there's a good chance it was built and deployed on Vercel.

[Ben Gilbert]

So for the past decade, they've been on a mission to democratize the lessons of the giants companies like Google and Amazon and Meta. And the idea is developers shouldn't have to spend weeks and engineering resources to stitch together dozens of services just to launch a web app.

[David Rosenthal]

Vercel made it simple. You write code, you ship it fast, globally distributed and without developing a second skill set in the nuances of deployment. That's the magic of their framework defined infrastructure, which basically lets developers and large teams go from idea to production without any friction.

[Ben Gilbert]

So as you may know, Vercel has been synonymous with front end development, but now they do backend and agentic workloads as well. Vercel calls this the AI cloud. Purpose built for the next era of apps and already in production across companies like Under Armour, PayPal, Notion and AI startups like Runway, Decagon and Browserbase.

[David Rosenthal]

Yep, the AI cloud takes removing deployment friction even one more step. In some cases, developers don't even need to push code anymore and agents can release features continuously. Infrastructure configures itself and interfaces adapt to how you work.

[Ben Gilbert]

If you want to build the future of software, head to vercel.com acquired that's V-E-R-C-E-L.com acquired and just tell them that Ben and David sent you. Now is also a great time to thank another of our favorite companies, Anthropic and their AI assistant, Claude.

[David Rosenthal]

Claude has really transformed our workflow here at Acquired. Preparing to interview Jamie Dimon requires serious research, obviously. Decades of banking history, regulatory changes, three financial crises, building the fortress balance sheet. This is exactly the kind of complex analysis that Claude is excellent at. Ben and I have never had assistants here because we think it's important for us to do the research ourselves. But Claude now gives us the best of both worlds. It's an extra set of hands that we have full control and visibility into what it's doing and how.

[Ben Gilbert]

So where Claude is especially great for me is Extended Thinking Mode. When I asked it to analyze JP Morgan's strategy through multiple financial crises. I could watch Claude's reasoning through each decision point step by step.

[David Rosenthal]

And it has full context by connecting to our entire 10 year base of knowledge here at Acquired through something called mcp, which you might have heard about the Model Context Protocol. They have pre built integrations with Gmail and Google Docs and also services like Jira, asana, Linear Square, PayPal, as well as custom integrations for any internal tool that you have.

[Ben Gilbert]

And Claude is built by Anthropic with a laser focus on accuracy and trustworthiness, which is exactly what we need.

[David Rosenthal]

Yep, if you want to start using Claude yourself or for your organization, go to Claude AI Acquired. And they've got a special offer for acquired listeners. Half price Claude Pro for three months, which gets you access to all the features mentioned above.

[Ben Gilbert]

So whether you're preparing for your own high stakes meetings, interviews or conversations with or you just need an AI you can trust with serious work. Claude thinks with you, not for you. That's Claude AI Acquired. All right, David, catch us up to the merger.

[David Rosenthal]

So you run Bank One for four years from Chicago and then in 2004 you merge with JPMorgan Chase in what is termed at the time a merger of equals. I think JPMorgan Chase referred to it as that Bank One shareholders get 42% of the combined company. I mean, I think people don't realize how much of JPMorgan Chase is Bank One today.

[Jamie Dimon]

That's why it's a little irritating me when they say you've been running it. Since I was running JP Morgan, I was running 40% of the company for the whole time. And when I got to Bank One and I'm not working around the clock, I already knew that a logical strategic merger might be JP Morgan. I know all these companies and they. That's the other thing about fortune's balance sheet is you also have real strategies that survive the test of time. You're not flipping and flopping. And then I'm sitting there and of course the tape comes, JPMorgan and Chase to merge. So we're worth like 25 billion. They're now worth like 80 billion or 90 or whatever the number was. I'm like, well, there goes that dream. But four years later, our stock was up to doubled or something like that. There's actually come in and it was in the target range. And I had been meeting with Bill Harrison, the current chairman of JPMorgan. At the time we were talking about it, we both knew it made business sense. They were kind of looking for a CEO. So we had been talking probably for a year and a half before that.

[Ben Gilbert]

They're looking for a CEO. Did they give Bank One shareholders 42% because they were looking for a CEO?

[Jamie Dimon]

There were two lawsuits. Okay, so we got the premium, they got the name and location. And I effectively had kind of control from day one because inside the merge agreement, and this is almost unheard of, when we get the premium is that to not have me become CEO 18 months later, 75% of the board would have to vote me out.

[David Rosenthal]

And the board default was you were.

[Jamie Dimon]

Going to become CEO and the board was eight bank one people and eight JP Morgan people. I knew a lot of the JPMorgan board members, too, who respected me. And Bill Harris and I were very close, but that was the agreement. They got sued for paying too much to buy me. I got sued for not taking enough. You get sued, you can't win anything.

[David Rosenthal]

I think every shareholder is probably.

[Jamie Dimon]

But it worked out.

[David Rosenthal]

Yeah.

[Ben Gilbert]

All right, 2006.

[David Rosenthal]

Before we get to 2006, when you're going through that process and even maybe the couple years before you and Bill were talking, you're starting to think about J.P. morgan as a partner. I'm curious, did the brand. Did the name JP Morgan factor into your thinking at all? Did you view that as an asset?

[Jamie Dimon]

I mean, JP Morgan brand is a Tiffany name. I didn't value it in the deal. And when I looked at I had given my board, I think the first thing is, run your company well. And people thought I was going to start doing deals immediately. I was like, no, we suck. We haven't earned the right to run someone else's company yet. When we're running a good company, we can merge with somebody. But the first thing I looked at was business logic and that every business. We had a consumer business. They had a consumer business. We had a credit card business. They were both terrible. They had a credit card business, they had a big investment bank. We had a big US Corporate bank that needed some of those investment banking stores. We both had a wealth management business. I knew we could save a lot of cost saves. So the business logic was pretty impeccable. Then there's the ability to execute. Like, can you actually get it done? Because you've all seen a lot of deals where they fall apart. They don't have management, they don't consolidate the systems. They have infighting. That kind of happened at Citi. And so you don't effectuate. And then there's the price. So I knew we had a Tiffany brand, but it didn't value. Because if everything else didn't work out, I don't think it would have mattered that much.

[David Rosenthal]

Interesting.

[Ben Gilbert]

All right, so I'm going to fast forward a couple years. It's 2006. You're officially chairman and CEO of the combined JP Morgan Chase.

[David Rosenthal]

And 2006 on Wall street is like, go, go, go, go, go, baby. It's like, you know, 1980s all over again.

[Ben Gilbert]

I think you had the same incentives as everyone else, but you behaved very differently. Am I missing something? Did you have the same incentives or.

[David Rosenthal]

Did you pull JP Morgan back hard on the risk side. In 2006 I did.

[Jamie Dimon]

So there were cracks out there. In 2006, you may remember the quants. There started to be a quant problem. And late in 2006 we definitely saw subprime getting bad. And that's. I pulled back on subprime. I wish I had done more because if you look what I did, you say, okay, well, you saved half the money, but you would have saved more.

[David Rosenthal]

You still had some losses.

[Jamie Dimon]

Yeah, but we also had, I'm going to say less, maybe a third of the leverage of the big investment banks and a lot more liquidity. So in 2006 I started to stockpile liquidity. And you know, looking at the situation, I was quite worried. The leverage, if you, you may not remember this, but the leverage, because of accounting rules and Basel iii, Basel I, investment banks, particularly the banks, big investment banks, went from 12 times leverage to 35 times leverage. And it was GoGo. So for every 1 billion bridge loans, the whole thing, like in 07, the bridge book of Wall street was $450 billion. Today it's 40 billion. JP Morgan can handle the whole 40 billion today, though we're not the 40 billion today. And they were much more leveraged deals and a lot of them fell apart, collapsed. And then of course, and that was before you had the collapse in the mortgage markets, which really took down a lot of these banks.

[Ben Gilbert]

But you did have the same incentives and you had the same access to information that a lot of these other folks did, but you didn't blow up. What explains this? Because usually behavior follows incentives.

[Jamie Dimon]

Yeah, well, first of all, if you work for me, I would tell you I don't care what the incentive is. Don't do the wrong thing and don't do the wrong thing to the client. If you treat yourself, if you're the client, how would you want to be treated? And I had gotten rid of, I mentioned that one risk thing. There were multiple risk things like that. They were being paid to take the risk.

[David Rosenthal]

You were telling us about the auto loan business.

[Jamie Dimon]

Yeah, they'd be being paid. But the second I put in all these new risk controls, all of a sudden you weren't making money by taking that leverage. Because I was looking at how much capital can actually be deployed if things get bad. And so I was looking at earnings through the cycle. But very importantly, all of these investment banks were doing side deals, private deals, three year deals, five year deals. I got rid of almost all of them.

[David Rosenthal]

This is for comp.

[Jamie Dimon]

Almost all of them senior bankers. So today at JPMorgan Chase. There are no we do do things, but. And I know some of my partners in the room here, but we all know about it. There are no winks, there are no nods. There are no side deals. There's almost no one paid on a particular thing because if you're paid on a particular thing, you can do the wrong thing. And meanwhile, you're not helping the company manage its risk or something like that. So we change the incentive programs. And I'm quite conscious about incentive programs that they don't create misbehavior. But it's also very important. If you're in a company and you say the incentive program is doing that, you should tell the company, this incentive plan is not incenting the right behavior versus via the customer. And a lot of it was leverage. So if you look at the leverage in some of these securitization books and mortgage books, if you have 30 times leverage and you're getting 20% of the profits, you'll go to 40 times leverage. It's just going to. It's literally at, you know, 25% to your bonus. And so I got rid of the profit pool, 20% and the leverage. So, yeah, and I lost some people too in the meantime.

[David Rosenthal]

It's funny.

[Jamie Dimon]

Yeah.

[David Rosenthal]

You know, JP Morgan as part of the system had the same incentives, but you change the incentives for the team within the company. Okay, all right, we got to go to 2008.

[Jamie Dimon]

March. March 13, 2008.

[David Rosenthal]

Thursday, 2008. It's Thursday night. You get a call from Bear Stearns CEO. The stock closed that day at $57 a share. It's like 150 a couple months before, three days later. God, I remember it like yesterday. I was working on Park Avenue and Wall Street. I remember that night. $2 a share, buying Bear Stern. Tell us the story.

[Jamie Dimon]

So I was at Avra on 47th Street. My parents and my parents favorite restaurant. My whole family was there. It happened to be my birthday. I don't normally get emergency happy birthday. And Alan Schwartz, who was the current CEO, we'd seen their stock go down. I knew they had some real problems because we saw the hedge funds and some of the things that were taking place there. And he said, Jamie, I need $30 billion tonight before Asia opens. To which I said, I don't know how to get $30 billion for you. And have you called Paulson? Have you called Tim Geithner? So we all called. I called up the management team. I went back in. I probably had a bite and said goodbye. Went back to the office. Probably had 100 people come in that day, that night they all got dressed, they went back to work. It's emergency. We now ring all the bells for emergency. Bear Stearns went bankrupt. Spoke to the Fed about, let's just get them to the weekend. We had one day and we needed Saturday and Sunday and we concocted this loan so we couldn't lend the 30 billion and the Fed technically couldn't lend the 30 billion, but the Fed can lend to us technically and I can technically use the collateral of Bear Stearns. So we got the literally one day loan and then the next day we had thousands of people come in due diligence and we went through every loan, every asset, every balance sheet, all the derivatives, all the lawsuits, all the HR policies like real due diligence, the two or three day period and bought the company at that night $2 a share. Hank Paulson was saying, why are you paying anything for it? I said, well, I do have to get shareholder votes. And which became, you need Bears shareholders to approve. It was a public deal. And the worst part of it is I was going to get the lawsuits from the bear holders. And I knew that you didn't pay enough. But we couldn't let it go bankrupt. It wasn't like an industrial car, you can buy it in bankruptcy. It would have been gone and the crisis would have just unfolded.

[David Rosenthal]

So what, okay, two questions. One, what would have happened if it, if it, if it went down? 2, afterwards, did you think it was over?

[Jamie Dimon]

No. So we already had, so that was March. You know what happened. Lehman was an uncontrolled failure. There was money locked up everywhere. People panic, they start pulling money out of everything. That would have happened with Bayer. So it did stop that. And I would have thought that it gave other people other time to clean up their act. So literally six months later, I would have thought some of the other firms were much, had more liquidity, more capital and were a little bit more prepared for might be happening. We already had the stress in the system was, you saw it already, it was going to mount, it wasn't going to go away. There were tremendous losses coming. So we bought it and you know, probably did help in hindsight. It didn't stop, you know, it didn't stop the crisis from unfolding. We bought it and then like a couple, like a week later we changed to $10 a share. It had been at 120 and the way to think of it is it was 300 billion of assets and at a $12 billion tangible book value. We wrote off the whole tangible book value in the. When we bought the company to pay, we had to liquidate the loans, we had to hedge stuff, we had severance costs, lawsuit costs, and we basically used all that. So we paid a billion dollars for a company that had been worth $20 billion recently. The building we're in now was worth a billion dollars on the balance sheet for zero. And we got some very good people and we got some good businesses, but it was a extremely painful process.

[Ben Gilbert]

I've seen estimates that in the fullness of time, after really dealing with unwinding all the stuff there, it costs you 15 to 20 billion dollars.

[David Rosenthal]

So it cost you 20.

[Jamie Dimon]

Anyway, it was the 12 billion we wrote off that didn't cost us. We didn't really pay for it. And then the government sued us on the mortgages, which I was quite offended by and I really was. I thought it was, I thought it was a problem. And then, well, this is the government. When you, you know, whatever government you did a deal with, that's not the government down the road decides, I don't care, we're going to come after you anyway. So while we kind of saved this system a lot, we bailed a lot of people out. They made US pay $5 billion on the bad mortgages that Bear Stuns had done. And that's what made me make the statement I wouldn't do it again. I wouldn't put it this way. I don't know how to say this. I wouldn't really trust the government again, would I?

[Ben Gilbert]

Gotta, I gotta ask a follow up question to that. Is that a structural thing just the way that we're set up with a new administration every four years?

[Jamie Dimon]

Yeah, they, they don't feel obligated to what the prior administration did. And you know, contract, even some contracts were violated in this thing, which I won't go through, literally contract. I mean it would have been tortuous interference had it been company to company. But they basically, you know, since you operate under their laws, you know, they can basically take you down. So you, you know, I went to see Eric Holder trying to settle his mortgage stuff, which we settled. I brought my lead director. He expected me to come and be pounding my chest and, and I went in and said, eric, I am here to surrender. I cannot fight and I cannot win against the federal government. You know that a criminal indictment can sink my company. I will not do that to my company or my country. I'm here to surrender. Before I surrender, I want you to know the circumstances by which we bought WAMU and Bear Stearns because 80% of what they were asking for related to bear Stearns and Wamu, not JPMorgan Chase. And I went through the whole thing. He said, thank you, I'll take in consideration. But they never gave me the counting, so I don't know what they did. And so it is what it is. It was quite painful, but gotta move on.

[Ben Gilbert]

We'll move on from this.

[David Rosenthal]

Well, we'll move on from the specifics. David's like, I do have one more thing. Whether you would have done it again. Wouldn't have, you know, very clear. It was not a great deal on paper for JP Morgan. But as we look at it now, the reputational value that jp, the reputation of JP Morgan now is unlike any other in the industry.

[Ben Gilbert]

Part of why you're worth $800 billion is that reputation. A lot of what created that reputation.

[David Rosenthal]

Was, was that weekend.

[Jamie Dimon]

Yeah. You know, if you're. Yes. And I know I say, I wouldn't trust the government. If the government called me up, they, they did it again. If they called me again and said, we need your help to save our country, well, of course I'm going to. I'm a patriot that way. I just, I would just try to come with some ways to avoid the punishment by the next president. I would come up with something.

[David Rosenthal]

You know what you need, like the version of the merger agreement with JPMorgan Chase where it's like a 75% of Congress needs to vote not to sue you. The default is you're not going to get sued. All right, all right.

[Ben Gilbert]

So Bear Stearns happens, six months later, you get another phone call, WaMu is going under. You do buy WaMu. Contrary to everything we're talking about with Bearer, WaMu is actually a great acquisition. Right?

[Jamie Dimon]

Yeah. So this is a lesson about acquisitions. It's very hard. Remember, we bought wamu a week after Lehman went bankrupt. And most boards wouldn't have touched that.

[Ben Gilbert]

At all because the whole system feels.

[Jamie Dimon]

The whole system was in trouble. But wamu put us in California, parts of Nevada, Arizona. Not Arizona, Georgia, Florida, which we weren't in. So think of these really healthy states. And they had, you know, 2,300 branches. They were. And they had, they had huge mortgage problems. But we had looked at it over and over and over. So we knew their mortgage books called and we wrote off. We bought it. And this was all before we bought it for $30 billion discount to tangible book value. Because they had debt and we left the debt behind. And so. And that 30 billion was approximately what the Moore's loss was going to be. So we bought the company. Think if we bought a company clean, we wrote off all that stuff, the books were clean. And then we did something unheard of too. The next day or two days later, I went in the market, raised another $11 billion of equity, which I didn't really need. But again, this is my conservatism. I was like, you know what? This could get even worse. And I don't want to be short capital liquidity. So we raised that to make sure our balance sheet was just as strong as it was after WaMu than it was before WaMu.

[Ben Gilbert]

And you already had the reputation to pull this off. Right. I'm imagining in the worst month of the financial crisis, who can go out and raise $11 billion of equity?

[Jamie Dimon]

Yeah.

[Ben Gilbert]

People. People trust you.

[Jamie Dimon]

Yeah, we knew a lot of the shareholders and you earned your trust over time with shareholders. And you know, we explained, we gave them a quick little presentation over, you know. Yeah. And a lot of them stepped up and said, this is great. They also know we can execute it because behind the Bear Stearns, people forget the work is the next day you got 50,000 people consolidating 5,000 applications, branches, compensation programs, settlement programs, payment systems. It's a lot of work. But we obviously have the capability to do that and we have the capability to do WaMu. I think we finished the WaMu consolidations in nine months, all of them. So that within nine months that we're all in the same systems, which allows you to start doing a better job in customer service and things like that.

[Ben Gilbert]

So this fortress balance sheet strategy and raising this equity capital and, you know, having additional margin of safety and conservative accounting, in retrospect, it seems like the obvious right strategy for running a large financial institution. Why wasn't everyone else copying it? Have people changed and does everyone else run their banks like this now?

[Jamie Dimon]

I think people, the people are more conservative today. I think regulators are more conservative today. But again, I go back to people get involved in aggressive accounting, they don't look at stressing their own bank in a real way. You know, you saw people take too much interest rate risk, too much credit exposure, too much optionality risk, or sometimes it's new products. So if you look at the financial services, very often it's the new products that blow up. It takes a while. They haven't been through a cycle. And you had that with equities way back in 1929. You had it with options, you had it with equity derivatives. You had it with mortgages, you had it with Ginny, even Ginnie Mae's at one point blew up even though they're government guaranteed.

[David Rosenthal]

Arguably you had it with quant and with ltm.

[Jamie Dimon]

It happened with leveraged lending. And then people then become more rational how they run these balance sheets now. They think through the risk.

[Ben Gilbert]

So I have to ask you, is this private credit today?

[Jamie Dimon]

Say it again.

[Ben Gilbert]

Is this private credit today?

[Jamie Dimon]

I don't really think so. I don't think it's $2 trillion. It's grown rapidly. That's an issue. But what happens the other thing about markets, there's some very good actors in it who know what they're doing. Customers like the product. So I always say, well, the customers like it, but there are also people who don't know what they're doing. And it's grown rapidly. So there may be something in there would become a problem one day, but I don't think it's systemic. So that 2 trillion, the mortgage market, when the time it blew up was, I'm gonna say nine trillion and a trillion dollars was lost. This is, you know, and it was.

[David Rosenthal]

A trillion dollars was also in a.

[Jamie Dimon]

Highly more than a trillion dollars back then. Yeah, a lot of these private credits are not leveraged like that doesn't mean there won't be problems. But it's slightly different. But you look at the whole system, there are other things out there that you know are levers that can cause problems. Of course, people take circuit secret leverage in a way you don't necessarily see it.

[Ben Gilbert]

What are some of these in your mind that are potentially problematic today?

[Jamie Dimon]

Well, look, I look at, when you look at asset price, they're rather high. I'm not saying that's bad. But if today PEs were 15 as opposed to 23, I say that's a lot less risk, a lot less to fall. And you have some upside. I would say at 23, there's not a lot of upside and there's a long way to fall. And that's true with credit spreads. So and we look at, we stress test everything. We do like 100 stress tests a week, you know, and to make sure we can handle a wide variety of things. And then the other thing and the biggest risk to me is cyber. I mean, I think this cyber stuff is, you know, we're very good at it. We work with all the government agencies. They would say that shade more stuff. We spend $800 million a year or something on it. We educate people on it. We just do. But it is, you're talking about grids and communications companies and water and even part of the military establishment. The protections are not what you need. If we ever get any kind of war where cyber is involved and China is very good at it, and so is Russia, but Russia is mostly criminal, which is slightly different.

[Ben Gilbert]

All right, I'm going to pull us back to the story. We're going to Fast forward to 2023.

[David Rosenthal]

We're not really equipped to talk about.

[Jamie Dimon]

Russia.

[David Rosenthal]

Something we do unacquired.

[Ben Gilbert]

But Silicon Valley bank and First Republic both fail. You're there again. Did you see it coming? What lessons did you learn from how 2008 went that you could apply in 2023? Obviously, you bought First Republic.

[Jamie Dimon]

It's a Silicon Valley bank. Both Silicon Valley bank did some very good stuff, but they both had something unique that we didn't know at the time. And I'm going to call them concentrated deposits, not uninsured, because people are misstating that concentrated. And so a lot of venture capital and what happened with Silicon Valley bank and kind of First Republic is some of these large venture capital companies call them. There are hundreds of them, maybe a thousand told their constituent clients that they invested in who all banked the Silicon Valley and First Republic. The banks aren't safe. Get out. And they all remove their deposits. And Silicon Valley Bank, I think they had 200 billion deposits, 100 billion in one day. And that caused the problem. But they also had other problems. They didn't have proper liquidity. They didn't have their collateral posted. The Fed and they had taken too much interest rate exposure. And the interest rate exposure was hidden by accounting. It was called hell to maturity, where you don't have to mark even Treasuries to market. And I always hated hell to maturity because. But it gives you better regulatory returns and stuff like that. But when that held to maturity, if you said, what's the tangible book value of one of these banks? You said it was 100. Well, all of a sudden it was 50. If you just mark that one thing to market and now you're into judgment land. At what point, if you saw a bank where just that one mark had the tangible book value dropped to 40 or 30 cents in the dollar, would you panic? I would have said, that's too much risk. And the regulators helped this because they said rates are going to stay low forever. So these banks bought a lot of 3% mortgages. And when, you know, 3% mortgage, when rates went up to 5%, you know, worth 60 cents on the dollar or 50 cents and that was it. And so both those had, they took too much interest rate exposure, known to management and it was known to the regulators and you know, and fixable. So, you know, we, we knew about a little bit about Silicon Valley Bank. We were trying to compete in that area. So we learned a lot afterwards about how to do a better job for that ecosystem of venture capital. We have a whole campus in Palo Alto now. We've hired 500 innovation bankers. We cover venture capital companies. We're not as good as they are yet. We're going to get there because we're organized slightly differently. And we knew First Republic, we were watching it. I called Janet Yellen that, I said that company's in trouble and one or two others, if you want to, we'll take a look. We could probably buy it and eliminate the problem. They waited a little bit too long. It was kind of a little melting ice cube. But you can imagine the day we bought it, you never heard about it again. We hedged all their exposures in a couple of days and we merged everything in, we wrote everything down. But we did get some good stuff from it. We actually got some good people. The normal thing in acquisition is they're terrible. Get rid of them or they failed. But we also looked at what they did, how they dealt with clients. Let me be clients here. They did a great job with high net worth clients. Single point of contact, concierge services. So now if you go down Madison Avenue, see things called JP Morgan Financial.

[Ben Gilbert]

Center, that's your first JP Morgan branded consumer effort.

[Jamie Dimon]

Yes, because it's kind of based on that. When you walk in there, we know your small business, we know your mortgage, we know your consumer banking, we can get you travel, we can do a whole bunch of different stuff. So very high level services. I think we have 20 of them now, but I love it. And if it works in 20 years, we have 300. And so these things are opportunities and I hope it works. You know, you don't always know they're going to work for a fact, but so far so good.

[Ben Gilbert]

All right, listeners, now it is time to talk about one of our favorite companies, statsig.

[David Rosenthal]

Statsig is the tool of choice for product development teams at hundreds of great companies, including OpenAI, Notion, Rippling, Brex, Atlassian and more. So why are all of these hypergrowth companies using statsig?

[Ben Gilbert]

Well, in the past, every major tech company spent years rebuilding the same internal data tools like feature flags, product AB testing, logging services, product analytics, dashboards, you name it. But the latest generation of great Companies are just using statsig.

[David Rosenthal]

Yep. Statsig has rebuilt the entire suite of data tools that previously was only in use at the biggest tech giants as a standalone product. This includes cutting edge product experimentation, feature flags for safe deployments, session replays, analytics and more, all backed by a single set of product data. It's a holistic suite to build better products.

[Ben Gilbert]

Statsig is also warehouse native so it can plug directly into your existing data in Snowflake Bigquery. Whatever you're using, that means way more privacy and security. Great for any finance listeners out there. Plus no sending your data to yet another tool.

[David Rosenthal]

So if you're ready to give your product and engineering teams access to great data tools, go to statsig.com acquired to get started. That's S T-A-T-S-I G.com acquired. They have a generous free tier and a $50,000 startup program. Just remember to tell them that Ben and David sent you.

[Ben Gilbert]

All right, so we're effectively caught up to today. And if we're trying to now we've got the whole story. We've got a lot of context. Obviously didn't go into every detail, but if we're now trying to answer yes, if we're now trying to answer the question, how did you separate from the pack? Why did you become a completely different animal than your whole competitive set? What are the things in your mind that led to this success?

[Jamie Dimon]

Well, as a guy, I mean, I don't know totally. First of all, because we skipped over strategy a little bit and this is important for you, all that we have, what we do is the same thing that a community bank does other than investment bank, global investment banking. Okay. So if you walk into a small community bank, they know your business account, they know your consumer account. They usually have a trust company, they used to call it trust. They manage your private affairs, they'd set up a trust for you and they do stuff like that. And their CRM is up here. They don't need a salesforce CRM because they know everyone in town and they didn't do big time global investment banking. But the strategy those businesses fit together, they feed each other and so does investment banking. A lot of our middle market clients use investment banking products. A lot of our consumer clients use some fx. So all of our businesses feed each other. There's no extraneous. We got rid of everything that didn't fit a strategy. And then you start building client businesses and client services, Fortress balance sheet, fortress accounting, all those various things. And I've always talked about so it's.

[Ben Gilbert]

Holding a portfolio of things that actually feed each other.

[Jamie Dimon]

They actually fit. Whereas Citi had consumer finance that didn't fit, Life insurance that didn't fit, property cash that didn't. They eventually got rid of them all. Sandy just wanted to do more of them. You know, he bought American General, which did truck leasing, for God's sake. I mean, and once you get involved in these things, it's hard for people to understand the risk in each one of these businesses. But all of ours fit. I don't like hobbies, I don't like things. And we've made plenty of mistakes because you have to try and test things. And then you're always investing for the future. That investment is always people, branches and technology. And that's true whether investment banking people or consumer bank people are opening consumer branches, or I think Doug Peto is here and Troy Rohrabach, who run the global investment bank. But they've opened, you know, commercial banking branches all over Europe. And I think you're telling me it's going great, you know, and it's feeding all other parts of the company. So just sticking to your knitting, constantly investing, you know, not overreacting to the market. Your markets are like accordions. And then sometimes, you know, it's if you're strong when others aren't, you have a chance to buy, buy things you want to buy. And then always look at the world from the point of view of the consumer. What do you want? How do you want it? How do you want to get it? Can we provide it to you in a way that makes sense for us too? Not going for the last dollar and not nothing like that, and building teams of people. Our people are curious and smart. They have heart, they have soul. They give a damn about the guards in the company and the receptionists. And it's not just about the big time bankers and people pounding their chest. You know, we don't try not to put up with that. And we have big time bankers. They are exceptional, you know, and. But the company, you know, serves the clients. And we have. And I think the clients know that.

[Ben Gilbert]

When you really dig in to start analyzing J.P. morgan's financials, you kind of see this one thing that jumps right out at you, which is the efficiency ratio. For every dollar that you make compared to your competitors, you get to keep $0.15 more of that dollar as profit. It's not hard to see how that compounds and how that allows reinvestments. And why is your efficiency ratio so much better than competitors?

[Jamie Dimon]

It is literally Continuously investing and gaining business at the margin and not stopping and not stop starting. And the thing about margins too is that we have that margin while investing a lot. It's much easier to have that margin and just, you know, we can cut billions of dollars of marketing out tomorrow. We can stop opening branches and save a billion dollars next year. We could do a lot of things. Your margins will go up, your growth will go down, your long term margins will probably get worse. So we kind of look right through the cycle and we look at the actual economics that we do, not the accounting of what we do. And you know, we have, you know, we've built it over time. You know, we have great people and great products and there's some secret sauce I'm not going to tell you about. We do investor Day and we tell everyone everything. And I'm sitting there watching my, I never do presentations. I'm watching them do the presentations. I'm saying, oh God, we're just giving away too many secrets here.

[Ben Gilbert]

But so there's secrets as to why the efficiency ratio, you know, I saw.

[Jamie Dimon]

Howard Schultz here before, you know, and I'm not supposed to say that probably.

[David Rosenthal]

It'S okay, it's okay.

[Jamie Dimon]

But. No, but we're glad you invited. Look what he built over the years, you know, the consistent consistency, the curiosity, the heart, the branch by branch products. It's just always doing that, knowing you're going to make mistakes, but building the culture that just kind of plows through that. And you all know I do use sports. Sports is a great analogy. If you have a sport team with a bunch of real jerks on it, are they going to be a great team? Almost never. You know, if the team members aren't giving it their best every day during practice, you heard the Tom Brady, every day at practice, you worked hard, you know, people are not giving their best. You're going to have a great team. It's not that different in business. The difference in business, you can BS about it all the time, you can make up stories, but in sports you see it, you know, on the playing field. Do they have the team, they play together. They don't even have to be friends. They have to practice, know their teams. And so I do think companies have that. It's like a sauce that works. And you've seen it lots of different companies, you know, not just JP Morgan Chase. So.

[David Rosenthal]

All right, we've got one last question for you. If you look back to 2008, which was a long time ago now to 2000, when to 2008, which was a long time ago. Now, all of the other leaders that were involved in that era have long since retired. I mean, I think many folks within JPMorgan Chase have long since retired. Since then. It seems like you're working as hard as ever and in it as much as ever. Why are you still here? What keeps you going?

[Jamie Dimon]

Yeah. So I want to thank my wife who's here too, who suffered through all this with me all these years and probably couldn't have done it, couldn't have done it without her. I don't know. Look, I don't know. But I do believe my grandparents, all Greek immigrants.

[David Rosenthal]

There we go.

[Jamie Dimon]

My grandparents were all Greek immigrants who didn't finish high school. But there's a Greek ethic and you don't even realize you learn it from your parents from the ground up. And Judy's parents, my wife's parents were the same. Which is have a purpose. It could be art, it could be science, it could be military, it could be business. It could be just being a great parent, a great teacher. But have a purpose and then do the best you can, you know, give it your all. Don't, like, be one of those people who complain all the time, you know, you give it your best and then treat everyone properly. Everyone, you know, like if I. Including, like if there was a bully beating up on someone, you had to stand up for someone, you were not allowed to allow a bully to do it. So how you treat people, what you do. And so in my hierarchy of life, the most important thing is my family still is. The second thing is my country, because I think this country is the indispensable nation that brought freedom of speech, freedom of religion, freedom of enterprise, which we have to teach everywhere we go about how important it is. I don't think people fully understand it sometimes. And then my purpose, because, you know, my family doesn't want me home every day. And this is my contribution. Through this company, I can help cities, states, schools, companies, employees, and I get the biggest kick out of that. And so that's what I do. And as long as I have the energy, I'm going to do it. I can't imagine. I don't play golf. You know, my daughter, one of my daughters, said, dad, you need some hobbies. And I said, I do. Hanging out with you, family, travel, barbecuing, wine. We now like whiskeys. And I love history. I think history is the greatest teacher of all time. Hiking, I can't play tennis anymore because my back. But those are my hobbies. I don't buy fancy cars and stuff like that. But this gives me purpose in life beyond family and beyond country. Plus, I think this helps the country. I get to do a lot of things for our country that I just think are quite meaningful from this job. And so when I'm done with this, I don't know, I'll teach and write. I may write a book like Andrew Rossorkin did. I'll do something. But I got to do something. I'm not going to twiddle my thumbs and smell the flowers.

[Ben Gilbert]

There are a lot of people who have floated your name for political or policy roles over the years. It is hard. There is only one job that could possibly impact the country in a bigger scale than you're currently doing. Do you agree?

[Jamie Dimon]

Right now? Yeah.

[David Rosenthal]

Well, that's probably a great place to be. Jamie, thank you so much for joining us.

[Jamie Dimon]

David Ben, these guys are great, by the way. So thank you.

[Ben Gilbert]

Well, that is it for our conversation with Jamie Dimon listeners. Thank you so much to all 6,000 of you who came to watch in person. It was so cool.

[David Rosenthal]

So cool.

[Ben Gilbert]

Well, we have some thank yous. First to our partners this season, JP Morgan, an incredible partner to us here at Acquired Statsig, the best way to do experimentation and more as a product development team Vercel, your complete platform for web development and Anthropic, the makers of Claude. You can click the links in the show notes to learn more about each of them. As always, a huge thank you to Arvind Navaratnam at Worldly Partners for his excellent write up on the Jamie Dimon years of JP Morgan which is linked in the show notes. If you like this episode, go check out other recent episodes like the start of our Google series which is off to a screamin start. Our Rolex episode which is another one of our biggest ever and then our interviews. Steve Ballmer, Mark Zuckerberg, Howard Schultz. If you're new to the show, I think all of those are great places to start. After this episode if you are still looking for more and you're like I've already listened to all of those other episodes. We have a second show for you, ACQ2. The most recent is an episode with Jesse Cole, the founder and the CEO. Founder and owner.

[David Rosenthal]

Owner.

[Ben Gilbert]

Yeah, yeah, he wears a lot of hats. All of them are yellow at the Savannah Bananas for something completely different. Yes. And if you want to talk about this with the acquired community, come join the Slack acquired FM Slack. And with that listeners, we'll see you next time.

[David Rosenthal]

We'll see you next time.

[Jamie Dimon]

Who got the truth? Is it you?

[David Rosenthal]

Is it you?

[Jamie Dimon]

Is it you? Who got the truth now, hu?